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FCC Wants More Data for Cable TV Report
[November 28, 2007]

FCC Wants More Data for Cable TV Report

(AP) FCC (News - Alert) Wants More Data for Cable TV Report
AP Business Writer
The country's top communications regulator suffered a major defeat Tuesday night when fellow members of the Federal Communications Commission scuttled his effort to expand government control over cable programming.

A recent FCC report promoted by Kevin Martin, the agency's chairman, found that cable TV reaches a wide enough U.S. audience to trigger a rule within a 1984 law that would give the government significant new powers to ensure program diversity.

But a majority of the agency's five-member commission said the report endorsed flawed data and should have used other sources. Some said they weren't even aware of the agency's own numbers until Monday night.

"Our job of ascertaining the facts is made more difficult because the draft cherry picked the only data that justified the outcome apparently desired while suppressing other data," Commissioner Jonathan Adelstein said.

However, Martin defended his use of the data from publishing company Warren Communications News (News - Alert) Inc.

"We would have avoided all these fights if we probably just required the cable industry to file this data originally," said Martin, who sounded exasperated.

He attempted to broker a compromise with the other four commissioners earlier in the day -- a process that caused the FCC to delay its meeting nearly 12 hours. The meeting was initially scheduled for 9:30 a.m. but didn't start until about 9:15 p.m.

The cable subscriber threshold in dispute is known as the 70/70 rule, whereby 70 percent of U.S. households have access to cable systems with 36 or more channels, and 70 percent of those households subscribe.

The commission voted to approve to release the report to Congress and the public without concluding that the 70/70 threshold had been reached, FCC spokesman David Fiske said.

The agency will require cable operators, such as Comcast (News - Alert) Corp. and Time Warner Cable Inc. to provide subscriber data within 60 days after the report appears in the Federal Register.

The National Cable and Telecommunications Association said large cable operators -- representing 80 percent of the industry -- already provide the FCC with annual data on market penetration, which the industry argues is still well below the 70 percent threshold.

The industry lobbied heavily in recent weeks against a determination that the 70/70 rule had been triggered, and for the time being it has eluded new government oversight.

"We applaud the leadership of each commissioner who questioned and withstood the attempt to use incomplete data in order to justify greater regulation that is completely unwarranted by the competitive marketplace," Kyle McSlarrow, president and chief executive of the National Cable and Telecommunications Association, said in a statement.

If granted further authority through the 70/70 rule, Martin could have pushed through other proposals disliked by the cable industry, including a so-called a la carte service model that would allow subscribers to pick and choose channels they want rather than accepting bundled packages from cable companies.

Rebecca Arbogast, an analyst with Stifel Nicolaus & Co., said Martin probably should have never put the report on the agenda in the first place since the data were questioned even by his fellow Republican commissioners.

"He got bumped up against a wall today," she said.

In the past couple of weeks, the agency's two Republican commissioners, Deborah Taylor Tate and Robert McDowell (News - Alert), had questioned whether the report's subscriber data are accurate. Adelstein, one of two Democratic commissioners, has also expressed reservations.

All three said Tuesday night they didn't believe the 70/70 rule was reached.

Several U.S lawmakers were also dismayed by the agency's quest for more cable regulations.

Republican House Leader John Boehner of Ohio said last week in a letter to Martin that the FCC shouldn't expand its regulatory authority when there's ample competition. Twenty-three Republicans on the House Energy and Commerce Committee last week also said the FCC shouldn't use the rule to impose new mandates on the cable industry.

Federal regulators on Tuesday also decided to postpone voting on a proposal that would have required broadcasters to lease excess channels to small businesses owned by women and minorities.

Martin, who said the commissioners needed more time discussing the issue, has championed the plan in past speeches to increase diversity in programming and media ownership. The excess channels would have been available following the nation's digital transition in early 2009.

But the cable industry is fearful the agency would force cable companies to carry those channels, which it strongly opposes.

NCTA (News - Alert) spokesman Brian Dietz said the proposal dealing with minority ownership of channels could actually have resulted in less media diversity by forcing other programming off the air.

Dietz said the FCC also has twice before rejected must-carry programming over the last several years.

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